Government Funding for Small Business: Grant Funding

Millions of dollars in grant funds are available for small businesses, but since there are often too many strings attached, most small businesses still find it difficult to gain access to them. The basic problem is that grant funds are just not designed for use by startups.

Generally, grant funds are meant for specialized small businesses, which together usually account for just 0.1 percent of all small businesses that are listed in the yellow pages.

Now, this is certainly not good news for the remaining 99.9 percent of small businesses (and perhaps yours!). But they need not lose all hope, because what is also true is that if the right methods are employed, these small businesses can also gain access to available grant funds.

Things to Know About Grant Funds

Grant funds can be broadly classified into two different categories – money that is sponsored by the government and money that is sponsored by corporate financial organizations. Most of these funds have their own specific requirements, and only those businesses that fulfill these requirements, get to access to these funds.

Funding agencies often look for worthwhile projects such as those that might create jobs in remote towns and cities, or those that might aim to provide training to specialized groups.

One basic trick that businesses can use is to research grant funds that might be available and target those that best suit the needs and requirements of their mission and/or business project.

Where Are Grant Funds Available?

On the local level, small businesses can contact banks and other financial institutions for small business bank loans. On a larger scale, they can look for ‘venture funds’ as well as ‘angel investors’ who might be willing to fund the project and/or business plan.

Businesses can also get assistance from governmental agencies such as the Small Business Administration (SBA), which offers a wide range of grant funds for small businesses. To gain access to the most appropriate funds, it would be better if small businesses first have a look at the catalog of Federal Domestic Assistance.

The catalog provides valuable information about any places where grant funds might be available.

How to Gain Access to Grant Funds

Getting access to grant funds isn’t easy. That’s why it is extremely important to do your homework once you have located the grant that you want. Here are some tips to maximize your chances of getting grant funds once you’ve identified the right one:

  • Make a worthwhile business plan: To make the right impression on funding agencies, small businesses should first concentrate on creating a worthwhile business plan. The plan should be presented in a manner that highlights the merits of the business, and not the potential risks or shortcomings.
  • Maintain regular communications: To improve their chances of getting access to grant funds, small businesses should always try to maintain regular communications with the grant agent.

    A regular flow of information will help to eliminate problems that might act as barriers to getting access to grant funds. Above all, make sure that you are responsive if there is a request for additional information.

The most valuable tip, however, is that small businesses should never stop trying until they gain access to grant funds. There are many options available, and if businesses persevere just a bit more, it’s quite certain that they will finally get exactly what they have been looking for.

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